How to choose when exchanging TWD to JPY? Actual test of the costs and exchange rate differences across 4 major channels

Is it really cost-effective now? Let’s look at this data first

By the end of 2025, the exchange rate of TWD to JPY will reach 4.85, an increase of nearly 9% compared to 4.46 at the beginning of the year. If you exchange 50,000 TWD, this appreciation alone allows you to get over 700 more yen, but that doesn’t mean you should rush to the bank now.

The real key is how much cost you can save through your chosen currency exchange channel. The same 50,000 TWD, choosing the wrong method could cost you an extra 1,500 yuan—equivalent to a big meal in Taipei.

Why are Taiwanese people all exchanging for yen?

Yen is not just a travel currency; there are two underlying reasons.

Everyday life: Most Japanese transactions are cash-based (credit card penetration is only 60%), and with increasing demand for online shopping, studying abroad, and working holidays in recent years, the demand for yen exchange has directly risen. In the second half of this year alone, Taiwan’s yen exchange demand has grown by 25%.

Investment perspective: Yen is one of the three major safe-haven currencies globally (the other two are USD and Swiss Franc). During the Russia-Ukraine conflict in 2022, the yen appreciated by 8% in a week, successfully offsetting stock market declines. For Taiwanese investors, holding yen is like adding a “conflict insurance” to their Taiwan stocks.

Additionally, the Bank of Japan recently signaled a potential rate hike (Governor Ueda Kazuo has a high 80% probability of raising interest rates), making long-term yen appreciation prospects promising. This is why even investors are starting to pay attention to the TWD/JPY exchange rate fluctuations.

Which of the 4 currency exchange channels is the cheapest?

First: Bank counter cash exchange—safest but most expensive

Taking TWD to a bank or airport to exchange for yen cash is the most traditional method. The advantage is safety and full denominations (1000, 5000, 10000 yen), but the downside is obvious: banks use “cash selling rates,” which are 1-2% worse than market prices.

For example, Taiwan Bank’s same-day cash selling rate is 1 yen = 0.2060 TWD (meaning 1 TWD = 4.85 yen). Some banks also charge an additional handling fee of 100-200 TWD.

Actual cost for exchanging 50,000 TWD: Loss of 1,500-2,000 TWD.

Suitable for: Urgent airport needs, people unfamiliar with mobile operations.

Second: Online currency exchange + in-person withdrawal—an intermediate solution

This method involves using bank apps or online banking to convert TWD to yen (using “spot selling rate,” about 1% cheaper), with funds stored in a foreign currency account. When cash is needed, go to the counter or foreign currency ATM to withdraw.

Advantages include better exchange rates and the ability to buy in installments (buying at lows to average costs). Disadvantages are the need to open a foreign currency account in advance and paying a handling fee of at least 100 TWD per withdrawal.

Actual cost for exchanging 50,000 TWD: Loss of 500-1,000 TWD.

Suitable for: Those with forex investment experience, wanting to gradually build positions. The yen can then be placed into yen fixed deposits (current annual interest rate 1.5-1.8%) or yen ETFs.

Third: Online currency settlement + airport pickup—best for travelers

Simplest steps: fill out an online form (select currency, amount, pickup branch, date), then bring ID and transaction notification to the designated branch to pick up cash. Taiwan Bank’s “Easy Purchase” online settlement can waive handling fees (pay with TaiwanPay for just 10 TWD), with about 0.5% better rates.

The biggest advantage is the ability to reserve airport branches for pickup. Taoyuan Airport has 14 Taiwan Bank outlets, including 2 open 24 hours, allowing you to pick up yen directly after landing without traveling to the city.

Actual cost for exchanging 50,000 TWD: Loss of 300-800 TWD.

Suitable for: Planning to travel abroad, with ample time, wanting to pick up cash directly at the airport.

Fourth: Foreign currency ATMs—most flexible but few locations

Using chips-enabled bank cards at foreign currency ATMs to withdraw yen, available 24/7, with cross-bank withdrawals costing only 5 TWD in fees. E.SUN Bank’s foreign currency ATMs have a daily limit of 150,000 TWD and no withdrawal fees.

Sounds convenient, but in reality, there are only about 200 foreign currency ATMs nationwide, and during peak times (especially at airports), cash can run out. Denominations are limited to 1000, 5000, and 10000 yen.

Actual cost for exchanging 50,000 TWD: Loss of 800-1,200 TWD.

Suitable for: Urgent, temporary needs, people who don’t have time to visit banks. Avoid last-minute withdrawals to prevent cash shortages.

Cost comparison of the four methods

Beginner tips: For a budget of 50,000-200,000 TWD, the most cost-effective combination is “online settlement + airport pickup” or “foreign currency ATM for emergencies.” Both methods save costs and reduce hassle.

How to time your TWD to JPY exchange?

The key is not whether it’s “cheap now,” but the overall trend.

Currently, the yen is in an upward cycle: the Bank of Japan is expected to raise interest rates to 0.75% by December 19 (a 30-year high), and Japanese bond yields have hit a 17-year high of 1.93%. These support long-term yen appreciation. However, in the short term, the US rate cut cycle and global arbitrage unwinding could cause 2-5% volatility.

Practical advice:

• Exchange in 3-5 installments rather than all at once
• Set targets, e.g., add more yen when TWD/JPY drops below 4.80
• After exchanging, don’t just leave it idle—deposit into yen fixed deposits or buy yen ETFs (like 00675U, 00703) to lock in exchange gains and earn interest

What to do after exchanging yen?

If you already hold yen, here are some options:

Conservative: Deposit into yen fixed deposits, with 1.5-1.8% annual interest—“risk-free income.”

Advanced: Buy yen-denominated savings insurance (guaranteed interest 2-3%) or yen ETFs (tracking yen index, management fee 0.4%).

Aggressive: Engage in yen forex trading, directly trading USD/JPY or EUR/JPY to capture short-term fluctuations. Requires opening a forex trading account, but offers two-way and 24-hour trading.

While yen is a strong hedge, it also has two-way volatility risk. For investment purposes, diversify risk with ETFs rather than betting on a single exchange rate direction.

Common misconceptions for beginners

Misconception 1: “Cash exchange rate = actual bank rate”
No. Banks’ cash rates are their quotes, adding 1-2% markup. The real market rate should be the “spot rate” or online banking app quote, which is closer to the international market.

Misconception 2: “TWD appreciation means cheaper yen”
Reverse thinking: If TWD appreciates (1 TWD = more yen), it’s advantageous for exchange. But the recent trend shows TWD depreciating and yen appreciating. So, now isn’t the time to wait; consider exchanging early before yen fully appreciates.

Misconception 3: “Foreign currency ATMs always have cash”
Don’t believe it. Especially during peak travel seasons and at airports, yen cash often runs out. Plan 2-3 days ahead or use online settlement to reserve airport pickup for safety.

Summary

Exchanging TWD to yen is no longer just a last-minute travel need; it’s a financial decision with hedging and investment value.

The core logic is simple: Choosing the right channel can save over 1,000 TWD; timing it well can earn a few hundred more; and properly managing your yen assets after exchange turns this into a real investment.

If you plan to travel, online settlement + airport pickup is the smartest choice. For investors, staggered exchange + yen fixed deposits or ETFs are the correct long-term strategies.

The key is not letting the exchanged yen sit idle—doing so wastes both the potential for exchange rate appreciation and interest income.